Around midnight of 2-3 December 1984,
at the Bhopal plant of Union Carbide India Limited (UCIL),
large amounts of water entered tank E-610 containing
methyl isocyanate. It caused an exothermic reaction
that increased the temperature inside the tank to
over 200°C, raised the pressure alarmingly, forced
an emergency venting and so released some 28-40
metric tons of the toxic gas in the atmosphere.
Thousands died immediately from the effects of the
gas — mostly the poor who lived in shanties around
the plant.

The mortality estimates vary. The immediate official
death toll was 2,259; later, the government of
Madhya Pradesh upped it to 3,787; other estimates
hover around 16,000 deaths — some 8,000 who died
within the first week or so, and another 8,000 who
died thereafter due to gas-related diseases. Bhopal
is the world’s worst ever industrial catastrophe.
Nothing comes remotely close.

Warren Anderson, the global executive chairman and
CEO of Union Carbide, having come to Bhopal after
the disaster, was arrested and almost immediately
released on bail by the Madhya Pradesh police on 7
December 1984. He was allowed to go back to the US,
apparently under express instructions of Arjun Singh
and Rajiv Gandhi, and refused to return to India.
Now we are being told it wasn’t Rajiv Gandhi’s
decision. Instead, it was due to Lord Voldemort of
the Congress — the late P.V. Narasimha Rao, who must
never be named except to pin some evil. Be that as
it may, Anderson got away. And with the US refusing
to extradite, Anderson spends his old age in a
mansion in Long Island. So, the executive chairman
and CEO of the company that wreaked havoc on the
people of Bhopal remains scot free.

But not the non-executive chairman of UCIL. After 25
years and six months, the judiciary has arrived at
an epic judgement. Seven people have been convicted
and sentenced to two years jail plus a trifling
fine. These are: Keshub Mahindra, who was in 1984
the non-executive chairman of UCIL; Vijay Gokhale,
who was then the managing director; Kishore Kamdar,
then the vice-president; J.N. Mukund, then the works
manager; S.P. Choudhary, who was the production
manager; K.V. Shetty, the plant superintendent; and
S.I. Quereshi, the production assistant. Six of them
were executives of UCIL, of whom five were directly
involved with the Bhopal plant. One out of the
seven, Keshub Mahindra, had no executive position
whatsoever.

Consider two aspects of this trial and judgement.
The first is that it has taken over a quarter of a
century, making cruel mockery of the phrase that
justice must take its own course. Second, that the
learned judge doesn’t seem to understand the
distinction between the liability of a manager and
that of a non-executive, independent director.

In 1984, there was no SEBI, and no definition of an
independent director. Keshub Mahindra was
technically the non-executive director and chairman
of UCIL. But he wasn’t a totem non-executive
director, by which I mean one who belongs to the
promoter group and has clear pecuniary interests in
the business but by not earning a salary or
perquisites qualifies as a non-executive director.
He didn’t own shares in the company; didn’t belong
to the promoter group; wasn’t an ex-managing
director or an ex-manager of either UCIL or Union
Carbide; was paid a princely sitting fee of Rs.250
per meeting attended. In today’s terminology,
Mahindra was an independent director, and
fundamentally no different from four others on the
board, namely A. M. M. Arunachalam, N. N. Lahiri,
Bhaskar Mitter and J. N. Saxena.

Forget about Keshub Mahindra’s age, or his stature
in corporate India. I wouldn’t want him to be
treated differently because he is 86, excellently
mannered and liked by all around him. But there is a
question of sanity in law. How can one treat an
independent director who has absolutely no
managerial role in the same way as a full time
employee? What canon of legal sensibility suggests
that for a plant-related failure such as in Bhopal
the independent non-executive chairman of the board
is as culpable as the works manager or the plant
superintendent or, for that matter, any executive of
the company? Would it not be akin to jailing the
independent directors on the board of the National
Aviation Company of India Limited, such as Amit
Mitra, Harsh Neotia and Anand Mahindra, for the
Mangalore crash?

Since Keshub Mahindra was neither involved in the
working of UCIL nor a promoter or significant
shareholder, why is he being treated the same way as
the works manager and the plant superintendent?
Since when has the Indian Penal Code adopted the
concept of vicarious liability?

If this decision isn’t quickly modified, it will
make a number of outstanding independent directors
think twice about remaining on boards. Which would
be excellent for law and corporate governance — a la
India.